ZURICH, July 4 (Reuters) - Swiss inflation dipped slightly last month, government data showed on Thursday, encouraging markets to shorten their odds that the central bank will cut interest rates again later this year.

Consumer prices rose by 1.3% in June compared with a year earlier, against the 1.4% rate in May and the 1.4% forecast in a Reuters poll.

Market expectations for a 25 basis point cut by the Swiss National Bank in September increased to 53% after the data was released, up from a 44% likelihood on Wednesday.

"These inflation numbers are no hurdle for the SNB to cut its policy rate once more in September," said UBS economist Alessandro Bee.

June's reading was the 12th month in succession that Swiss prices have been within the 0-2% range targeted by the SNB, which it describes as price stability.

Month on month prices remained unchanged, the Federal Statistics Office said.

While some products, including vegetables, foreign holidays and hotels, registered price increases, this was offset by cheaper air transport, petrol and diesel. Clothing and footwear were also cheaper because of retailers' summer sales.

"The short-term inflation trend is currently highly relevant as it shows whether new price momentum is building or not," said Thomas Gitzel, an economist at VP Bank.

"And the lack of a direct monthly increase in inflation shows that there is no danger in the short term either," said Gitzel, who expects the SNB to reduce its policy rate by a further 25 basis points this year.

The SNB cut interest rates to 1.25% last month, the second cut this year, saying underlying inflationary pressure has decreased. It also lowered its inflation forecasts.

Karsten Junius, Chief Economist at J.Safra Sarasin said he expected the SNB to cut rates in September, with possible further cuts after that.

The central bank would also want to head off deflationary risks, Junius said.

"The risks to price stability have become tilted towards the lower side, meaning that the SNB has to act such that inflation is not falling too much," he said. (Reporting by John Revill Editing by David Goodman and Tomasz Janowski)